Why are oil prices dropping so rapidly?

In fact oil price was raised artificially.Now when entire world is passing through a very deep recession and real economy is sharply effected, demand of oil considerably decreased.No one can predict for how long it will continue.It is main reason for rapid dropping of oil prices.Why are oil prices dropping so rapidly?
My dad works at BP oil refinery. He told me the drop in oil prices is mainly due to the economy because of the change at hand with the president. He said the prices are stablized right now and should be that way for a while but its mainly cuz of George W leaving office and the oil companies' tie in's with him. Why are oil prices dropping so rapidly?
The economy is unpredictable right now. The main reason why the barrel of crude oil drop from the $145 (4 months ago) to the mid 70's even 60's its the same reason why the Dow lost 2k points during the past 4 months as well. The economic crisis has place the entire world into a recession, if you notice when the Dow had (still does) days losing 500-700 points, the world markets were in trouble. The Oil Tycoons from Saudi Arabia have investments just like any the rest of the world has in the U.S economy (The U.S dollar is the universal currency btw) so they lost a lot of money due to the crisis. They need to regain losses, looking at 30-40% losses here for the big $ Guys. It does not have to do with Bush leaving office (he started this mess in the first place) They need to sell more oil to regain capital money so the free market moves forward again. There are also a few key like the U.S drop in oil consuming (people dont have $$ and many are still scare of seen 4 gallon of oil) that forces Oil companies to drop the prices so people start consuming again.





P.S = kinda complicated but in conclusion.


Economy is bad - Global crisis around the markets


Oil tycoon in Saudi Arabia lost a lot of money with their investments (example City group needed a bail out last year, and it got it from Saudi Arabia oil industry)


Every economic ramification is on hold - no consumer spending leading to cheaper oil
For a number of reasons. People have slowed down on traveling and the U.S. has threatened to drill here in the states. A lot takes place behind closed doors that we don't know about.
1. Over the past couple of years, the US dollar has been dropping in value in relation to the other currencies. This results in more expensive imports. Following the economic collapse, the world rallied behind the US dollar, which increased in value significantly overnight.





2. The world is broke. People in the US haven't decreased oil consumption all that much, since we need it to do anything. People in Europe and Asia, however, have decreased oil use significantly. The law of supply and demand dictates that if demand decreases, then prices drop.





3. Oil prices always drop a bit during the presidential elections. Low prices helped the republican party's chances of winning.
Well, for starters, summer is over, so people are driving less. The economy is in the dumps, so people are buying less, meaning less products are being shipped (via truck, train, etc.). People were hit hard by the $4 gas, and some of them actually switched to more fuel efficient cars.





The price seems to have leveled out a bit for now. When it gets colder and more oil is used for heating oil, we'll see what the price goes to (though this typically has more of an impact on diesel prices than gas, as fuel oil is manufactured at diesel refineries).